 "Vinita Gupta")
Drug maker Lupin posted a 12 per cent decline in its net profit in the third quarter of FY16 as US business remained weak. The company’s chief executive officer Vinita Gupta tells Aneesh Phadnis the company’s US business is set to rebound and it will grow in double digits in FY17. Edited excerpts:
In the third quarter, Lupin received nine approvals and launched four products in the US. However, the US business saw flat sales in the quarter...Our US business is on the road to recovery. On a sequential basis, the business grew 20 per cent. We saw 18 per cent and 56 per cent growth in our generic and brand businesses, respectively, in the US on a quarter-on-quarter basis. The major contribution to sales in the third quarter was from existing portfolio and we will see the impact of new product approvals in the fourth quarter. However, we continue to face the impact of price erosion due to consolidation and launch of many generic products in the US.
Lupin had earlier said it would close its $880-million acquisition of drug maker Gavis in the third quarter. What is the status? How many products has Gavis launched this year?
We are working to close the transaction and it has taken longer than expected. We hope to receive Federal Trade Commission’s approval and conclude the deal by month-end. Gavis has launched a number of products and has received multiple product approvals. We hope to grow the business further. We expect our US business to grow in double digits in FY17.
Recently, the US Food and Drug Administration (FDA) inspected three plants of Lupin in India. Do you have any concerns regarding that?
In the past few months, FDA inspected our plants at Aurangabad, Pithampur, and Tarapur. There were 483 observations regarding the Aurangabad plant and we have given our response to FDA. We have addressed the issues and there are no concerns about these plants. We are supplying products from all the three plants.
Last year, Lupin announced acquisition of companies in Brazil and Russia. Both the countries are facing currency depreciation issues. How is the company coping with the challenges?
We have closed the buy of Medquimica in Brazil in June. There has been a decline in revenue due to currency fall.
Brazil represents a long-term opportunity for us and we are focusing on investing in a new team and optimising the portfolio. The acquisition of Biocom in Russia is under review. There is a provision in the deal, which allows us to revisit the agreement in case of currency fluctuation and we are reviewing it. However, we hope to conclude the deal and we see Russia as a strategic market.
How is the domestic business faring?
We have seen a 16 per cent year-on-year growth in domestic business and all key segments such as asthma, diabetes and cardiovascular are showing growth.
